As a financial advisor, I have been approached by numerous self employed individuals for their financial concerns. So I’m writing this blog just to help out such self employed professionals.
As a business owner or self employed person, one needs to learn Multi tasking. You may be having a busy schedule where you strive to make more profit, find better clients/deals, attend meeting and stay update about the latest market events or culture.
You may find it difficult to find time to do finances or may be confused about choosing the right option. Here are some of my most important financial advices that will help you plan better:
- Income tax payments:
Often self employed people find it difficult to manage their finances. Mainly because they are responsible for everything and there is no one to share the burden. However, tracking the expenses and paying taxes are important for every earning individual. One has to be dedicated toward their goal. This will helps in saving cash along with eases payment of bills/taxes.
As a self employed individual numerous deductions are applicable. I will recommend you guys to hit google and do some research. Understand what can and cannot be deducted. You can claim deductions for your repairs and maintenance, utilities, rent or mortgage interest etc.
- Borrowing money:
Often to save income tax, business owners put majority of their revenue into the company income and give themselves a small income. This strategy may backfire while you apply for a loan because most of the bank will analyse your personal income and not the company’s income for the loan procedure.
- Protect your personal assets:
This is one of the most crucial points for a self employed business person. Make sure that the business is established as a separate legal entity. This is the best technique of safeguard your personal finances. This will protect your money from unhappy customers or business creditors.
- Credit cards:
Have separate personal and business credit cards.
As a business person, one should be able to plan an effective business budget. Track your expenses, control your spending and then develop a budget that is best for your business. Spend money on things that add value to your business.